{"id":4006,"date":"2023-06-22T01:54:49","date_gmt":"2023-06-22T01:54:49","guid":{"rendered":"https:\/\/latestnews.top\/2023\/06\/22\/bank-of-england-under-pressure-as-prices-shock-leaves-britain-in-slow-lane\/"},"modified":"2023-06-22T01:54:49","modified_gmt":"2023-06-22T01:54:49","slug":"bank-of-england-under-pressure-as-prices-shock-leaves-britain-in-slow-lane","status":"publish","type":"post","link":"https:\/\/latestnews.top\/bank-of-england-under-pressure-as-prices-shock-leaves-britain-in-slow-lane\/","title":{"rendered":"Bank of England under pressure as prices shock leaves Britain in slow lane"},"content":{"rendered":"


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Bank of England under pressure as prices shock leaves Britain lagging US and Europe in battle against inflation<\/h2>\n

By John-Paul Ford Rojas For The Daily Mail<\/a> <\/p>\n

Updated:<\/span>

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The Bank of England will be under pressure to increase the pace of interest rate hikes today after official figures showed Britain still lagging behind the rest of the G7 in the battle against inflation.<\/p>\n

Rates are expected to rise for the 13th time in succession, to 4.75 per cent, when the Bank\u2019s Monetary Policy Committee announces its decision at midday.<\/p>\n

But yesterday\u2019s worse-than-expected inflation data from the Office for National Statistics (ONS), showing inflation was stuck at 8.7 per cent, has left the question of the size of the increase on a knife edge.<\/p>\n

Financial markets were last night betting that there was a 51\u00a0per cent chance that rates would go up by a quarter of a percentage point to 4.75\u00a0per cent versus 49\u00a0per cent that they would go all the way to 5 per cent.<\/p>\n

And further increases all the way to 6\u00a0per cent by the end of the year are pencilled in \u2013 something that experts fear will precipitate a recession.<\/p>\n

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Price spiral: Latest inflation data from the Office for National Statistics showed UK inflation stuck at 8.7%<\/p>\n<\/div>\n

Yesterday\u2019s May inflation figure was a bitter blow to the Bank of England which has been raising rates rapidly to try to curb Britain\u2019s price spiral.<\/p>\n

Inflation has come down from the peak of 11.1\u00a0per cent last October but not nearly as quickly as hoped. It remains more than four times higher than the Bank\u2019s 2 per cent target.<\/p>\n

Worryingly, a measure of \u2018core\u2019 inflation \u2013 stripping out volatile factors such as energy and food \u2013 is going up even as the headline measure falls.\u00a0<\/p>\n

It climbed to 7.1\u00a0per cent in May, according to the ONS data. Britain\u2019s record fighting inflation pales in comparison with other large economies and is the highest in the G7.<\/p>\n

In the eurozone, inflation has fallen to 6.1 per cent and even in Italy \u2013 often scorned as a basket case by foreign commentators \u2013 it is lower than in Britain, at 8 per cent.<\/p>\n

America, the world\u2019s biggest economy, looks to be on top of the problem after an aggressive series of rate hikes saw inflation fall to 4 per cent.<\/p>\n

That has allowed its central bank, the US Federal Reserve, to hit the pause button on rate hikes.\u00a0<\/p>\n

Yet the problem of global inflation \u2013 which spiralled last year after Russia\u2019s invasion of Ukraine \u2013 has not entirely disappeared outside of the UK.<\/p>\n

Fed chairman Jerome Powell told a congressional hearing yesterday that \u2018inflation pressures continue to run high\u2019.<\/p>\n

Ruth Gregory, deputy chief UK economist at Capital Economics, said: \u2018Inflation in the UK has stayed higher than elsewhere as the UK has endured the worst of both worlds \u2013 a big energy shock, like the eurozone, and labour shortages \u2013 even worse than the US.\u2019<\/p>\n<\/div>\n

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